$23M in Dynegy sales pending

TOWN OF NEWBURGH — Dynegy will sell its Roseton and Danskammer power plants to separate buyers for a total of $23 million, according to papers filed Monday in the company's bankruptcy case.

Danskammer would be retired and demolished as part of one deal. The mostly coal-fueled plant — the No. 1 polluter in Orange County in 2010 — was rendered inoperable by flooding during Superstorm Sandy.

Dynegy has said the plant requires $375 million in environmental upgrades to comply with regulations. Even before Sandy hit, there were no bidders interested in operating it, said Dynegy spokeswoman Katy Sullivan.

Roseton, which runs mainly on cheaper, cleaner natural gas, will continue to operate.

It will be sold to Louis Dreyfus Highbridge Energy, headquartered in Stamford, Conn., for $19.5 million. The company, which in October was acquired by a number of private investment vehicles and independent investor groups, will pay the outstanding taxes on the property.

ICS NY Holdings, a division of Interstate Construction Services in Phoenix, will pay $3.5 million for Danskammer, and will be responsible for razing the plant and remediating environmental issues on the land.

ICS will be responsible for all taxes on the site that come due next year. Dynegy will pay all overdue taxes, Sullivan said.

ICS may be barred from building another power plant on the site, pending negotiations with LDH.

The vacant Danskammer site could be used as a terminal for a transmission line, helping ease energy bottlenecks in downstate New York, said Matthew Cordaro, an advisory board member of the New York Affordable Reliable Electricity Alliance. A transmission line terminal technically is not a power plant, he said.

In total, Dynegy is currently about $24 million in arrears to the Town of Newburgh, Orange County and Marlboro School District.

It is unclear when the money will actually be paid. It will take a couple of months for the sales to close, Sullivan said.

It is also unclear how the sales will affect Dynegy's pending legal challenges to its 2012 assessment. The power company filed papers this summer seeking to have its assessments for 2012 lowered 90 percent, claiming the plants had a market value of $64.9 million. Dynegy paid $903 million for the plants about 12 years ago.

LDH, the buyer of Roseton, agreed to honor the terms of Dynegy's expired contract with the International Brotherhood of Electrical Workers Local 320, as modified by Dynegy's Nov. 7 contract offer. The union did not agree to that offer when it was proposed, and more than 100 workers have been on strike since then.

The union had hoped to work under its existing contract with Dynegy during the nearly month-long sales process, and then renegotiate with a new owner. IBEW President John Kaiser did not return a phone call before deadline Monday.

LDH will be responsible for any severance obligations for Roseton employees who are not rehired, according to the sale papers.

Marlboro residents have been organizing grassroots organizations, urging Dynegy to pay its overdue taxes and the school district to trim its budget.

Steven Markle, a founder of Marlboro Community Concerns, reeled upon hearing the sale price for Danskammer and Roseton. He's worried that future skyrocketing taxes will push residents out of Marlboro.